You are on page 1of 43


Legal Environment Of Business

Team Members

     

A G Jain Anita Prajapati Master Govind Pooja Chauhan Tanisha Singh Vikas Jindal


    

Global Warming & its Implication Kyoto Protocol Carbon Credit Global Trading System Indian perspective
 Indian

StatutePre Tragedy  Rule of Strict And Absolute Liability  Environmental protection Act



Global Implication

The number of hurricanes has almost doubled in the last 30 years.  Malaria has spread to higher altitudes in places like the Colombian Andes, 7,000 feet above sea level.  The flow of ice from glaciers in Greenland has more than doubled over the past decade.  At least 279 species of plants and animals are already responding to global warming, moving closer to the


Global Implication Contd.. 

  

Deaths from global warming will double in just 25 years—to 300,000 people a year. Global sea levels could rise by more than 20 feet with the loss of shelf ice in Greenland and Antarctica, devastating coastal areas worldwide. Heat waves will be more frequent and more intense. Droughts and wildfires will occur more often. The Arctic Ocean could be ice free in summer by 2050.


son ea in R Ma for ters isas e D hes T

Climate Change

Rapid Industrial Growth Increased energy consumption Increased CO2 and other GHG emissions Global Warming due to increased concentration of GHG
Increased Sea Level Changes in wind and precipitation Changes in Crop yields


Remedial Measures

Kyoto Protocol

An amendment to the international treaty on climate change, assigning mandatory targets for the reduction of greenhouse gas emissions to signatory nations Only Parties to the Convention that have also become Parties to the Protocol will be bound by the Protocol’s commitments. (by ratifying, accepting, approving, or acceding to it) 183 countries and one regional economic integration organization (the EEC) have


May 1992: UN FCCC* establishes framework for containing global warming Dec 1997: Following intense negotiations in Kyoto (Japan), a protocol is agreed upon by over 100 countries Feb 2005: 141 countries, including EU, Japan, Canada, and Russia sign the Kyoto Protocol and it gets ratified w.e.f. 16Feb-05
– The US remains a key non-signatory

The Kyoto Protocol sets legally binding targets for reducing green house gases (GHGs)
– Developed countries have a target to reduce GHG emissions by 5.2% below 1990 levels, by year 2012 – EU members committed to reduce their average emissions by 8 % – India, China, and Brazil are classified as emerging countries and


exempted from this protocol

Green House Gases

Green house gases (GHGs) are gases that result in global warming

Degree of warming caused by a specific GHG depends upon its CO2 equivalence (CO2e) Carbon dioxide (CO2) Methane (CH4) Nitrous oxide (N2O) Hydrofluorocarbons (HFCs) Perfulourocarbons (PFCs) Sulphur Hexafluoride (SF6) Above-mentioned six are key ones, that can be controlled by human intervention with relative ease

6 GHGs are regulated under the Kyoto Protocol
– – – – – –

There are at least 25 other gases, including chloroform, CO, and water vapour that influence climate-change

Global warming potential

Global warming potential (GWP) for the 6 GHGs are summarised below: GHG : Global Warming Potential
     

Hydrofluorcarbons (HFCs) : 140 – 11,700 Perfluorcarbons (PFCs) : 6500 – 9,200 Methane : 21 Nitrous oxide : 310 Sulphur hexafluoride : 23,900 Carbon dioxide : 1

GWP is the global warming impact that a GHG would have over a 100-year timeframe
– By definition, CO2 is used as the reference benchmark, with GWP of 1



Carbon credits are certificates issued to countries that reduce their GHG emissions
One credit = 1 tonne of CO2 (or CO2 equivalent) reduced

Surplus credits result when a country overshoots its reduction target – These can be traded, with countries facing a shortfall in target able to buy and meet their targets – Carbon credit trading encourages emission reduction, provides financial

Kyoto Protocol Mechanism

The Protocol allows developed countries to reach their targets in different ways through “Flexibility Mechanism”
 Joint

Implementation (JI)  Clean Development Mechanism (CDM)  Emission Trading (ET)

K P Mechanism Contd..


PROJECT BASED CDM (Developed & Developing Countries) Carbon Reduction Units (CER)


JI (Between Developed Countries) Emission Reduction Units (ERU)

IET (Between Developed Countries) Assigned amount units (AAU)


1.International Emission K P Mechanism Contd.. Trading

Emissions trading (ET) is a mechanism that enables countries with legally binding emission targets to buy and sell emissions allowances among themselves Each country has a certain number of emission allowances (amount of carbon dioxide it can emit) in line with its Kyoto reduction targets The IET allows industrialized countries to trade their surplus credits on the international carbon credit market


2. Clean Development K P Mechanism Contd.. Mechanism
Technology Transfer & project Financing

Developed Countries


Developing Countries

Carbon Credits

CDM Cont..

The purpose of CDM is reduce to emissions and also contribute to sustainable development in developing countries The CDM is administered by the CDM Executive Board (CDM Board) which reports and is accountable to the Conference of Parties (COP). A Carbon emission reduction (CER) is given by the CDM Executive Board One CER is equivalent to one tonne of

CER – Source of Generation

Industries like
 Agriculture  Energy

(renewable & non-renewable sources)  Manufacturing  Metal production  Mining and mineral production  Chemicals  Afforestation & reforestation

3. Joint Implementation K P Mechanism Contd..

Projects between industrialized nations to earn emission offsets It is done because of geographical or cost implications Emission reduction units (ERUs) created through joint implementation is treated in the same way as those from emissions trading




European Union Emission Trading Scheme

The European Union Emission Trading Scheme (EU ETS) is the largest multinational, greenhouse emissions scheme in the world. It commenced trading in 2005 Under Kyoto EU committed to reduce 8% 1990 levels of emissions in 2008 to 2012

EU ETS Cont..

 

The Kyoto protocol sets targets to countries The States list down the amount and method of allocating allowances to facilities under NAP The total allowances granted = Kyoto target Determinants of demand Volumes are tracked by National registries


Indian Scena rio

How Carbon Credit works?

An Example:  British Petroleum in UK emitting more than the accepted norms of UNFCCC  Tie up with Subsidiary in India or China Under CDM  The credits arising out of the use of the new technology are sold to counterparts in Europe  Thus a carbon credit market is created

Carbon trading in India

 

 

Bilateral trade No fixed norms of emission reduction by government. Potential Participants Registry


Carbon Trading in India cont..

 

Multi Commodity Exchange of India Ltd. ( MCX) entered into a strategic alliance with CCX in September 2005 to initiate carbon trading in India. Offers Mini version of ECX CFI & CCFE SFI The tie-up would provide immense scope and opportunity for domestic suppliers to realize better prices for their carbon credits India being a major supplier of carbon credits, the tie-up between the two

India’s potential
 

 

India – Non Annexure I country, has a large scope in emissions trading India and china together contribute to $5 billion of the global carbon trade estimated at $30billion It is one of the leading generators of CERs through CDM Analysts forecast that its trading in carbon credits would touch US$ 100 billion by 2010 Currently, the total registered CDM projects are more than 300, almost 1/3rd of the total CDM projects registered with the UNFCCC The total issued CERs with India as a host country till now stand at around 34 million, again around 1/3rd of the total CERs issued by the UNFCCC

Benefits of Carbon Trading

Sellers and intermediaries can hedge against price risk There is no counterparty risk as the Exchange guarantees the trade The price discovery on the Exchange platform ensures a fair price for both the buyer and the seller Players are brought to a single platform, thus eliminating the laborious process of identifying either buyers or sellers with enough credibility


Provisions in Indian Statute Regarding protection of Environment

Bhopal Gas Tragedy
   

In city ‘Heart Of India’ named Bhopal UCIL.. Exposing 520,000 people to toxic gases.. Over 22,000 people died..
    

Due to:The use of hazardous chemicals (MIC) instead of less dangerous ones Storing these chemicals in large tanks instead of several smaller ones Possible corroding material in pipelines Poor maintenance after the plant ceased production in the early 1980s Failure of several safety systems (due to poor maintenance and regulations)

Leads to:

Pre Tragedy Indian Statute

 

The Water (Prevention and control of Pollution) Act, 1974 The Air (Prevention and control of Pollution) Act, 1981 Forest Conservation Act, 1980 The Wild Life Protection Act, 1972

Rule Of Strict liability

 

 

Formulated by House of Lords in 1868 Continues to be in Force in India under Article, 372 of Indian Constitution Available under Law Of Torts Rylands vs. Fletcher Case
 Construction

of Reservoir through independent

Contractor  Old Disused Shaft were neglected on the site  Resulting in flooding the adjacent coal mine with water


The Rule:
 “If

a person brings on his land anything which is likely to do Mischief if it escapes, He will be Prima Facie answerable for the damage cause by its escape even though he was not negligent”. Rule to be Applicable
 Dangerous  Escape  Non


Natural use of land


Exception to Strict Liability:
 Plaintiff’s

Own Default  Act Of God  Consent of the Plaintiff  Act of third Party  Statutory Authority


Post Tragedy : Rule of Absolute Liability
   

Due to failure of Rule of Strict Liability for its exception M. C. Mehta vs Union of India case. By Supreme Court in 1987 The Rule:
 “When

an enterprise is engaged in a hazardous or inherently dangerous industry which posses a potential threat to the health and safety of people, it owes an absolute and non-delegable Duty to ensure that no harm results to anyone from such activity”.


Environmental Law & Consitution Of India

Specific Provision for Environmental protection
 Article  Article  Article  Article  Article

19(1)(g)3 214 475 48A6 51A(g)7



Scope and Scheme of the Act
 Come

into force on 19 Nov 1986  Extends to whole of India  Fixes responsibility on person’s carrying on Industrial operations or Handling Hazardous substances  To comply with certain Safety norms for prevention, control and abatement of Environmental pollution.  Granted power to Central Govt. for environmental protection


        http://www.baker& Economic Labour & Industrial law by ICSI Economic law by V.S.Datey


Queri es


Than k you